ECB's Draghi signals 'unanimous' support for easing, euro drops - UPDATE

European Central Bank (ECB) president Mario Draghi said that policymakers were "unanimous" in their readiness to take more action on monetary easing to maintain price stability and curb a slowdown in economic growth, "if necessary".

The euro fell to a two-year low after the comments, down 0.52% to $1.2421 on the day, while European stock markets surged following the morning's caution.

Draghi said the ECB's governing council was prepared to use "unconventional measures" if needed to maintain price stability, indicating quantitative easing (QE) would be used - if deemed necessary.

In which case he said the council had "unanimously" agreed to make asset purchases to expand the ECB's balance sheet to around the €3trn levels of March 2012, which would require purchases of around €1trn.

The governing council will take into account new information and analysis to "closely monitor and continuously assess the appropriateness of its monetary policy stance" and had already "tasked ECB staff and the relevant Eurosystem committees [national central banks] with ensuring the timely preparation of further measures to be implemented, if needed".

BNP Paribas said that the significant changes in the ECB's rhetoric "signal a higher probability of more easing".

Economists at the French bank noted that Draghi had cited two contingencies that could prompt the ECB to implement additional measures: one would be an assessment that the measures announced are not enough and the other would be a reassessment of the inflation outlook.

Berenberg said it expected the ECB’s conditions for more easing will be met.

"That strengthens our call that the ECB will announce further easing measures at the December meeting, with a 60% chance for corporate bond purchases," said senior economist Christian Schulz, who foresaw action "potentially as early as the next meeting on 4 December or in early 2015 at the latest".

Draghi had also, according to a Reuters story on Wednesday, faced a rift within the ranks of the council, with a German-led minority of governors unhappy with his "secretive management style and erratic communication".

But his press conference rang a message of the council's unity, with Draghi stressing that there was no north-south divide apparent after a successful dinner meeting between the governors on Wednesday night.